The technical set-up is strong and the Nifty may test the 13,000-mark during the week. The level of 12,700 is the immediate support to watch for and every dip is a buying opportunity for investors, Gaurav Garg, Head of Research at CapitalVia Global Research Limited, said in an interview with Moneycontrol’s Kshitij Anand. Edited excerpts:
Q The Nifty lost momentum in the second half of the previous week as it witnessed profit taking close to 13,000. What led to the price action?
A) The Nifty50 witnessed profit booking at higher levels, majorly in banking and financial stocks due to which it lost momentum and failed to cross the resistance level of 13,000.
The global cues were also weak in the second half of the week as Wall Street indices declined, as investors were worried about soaring coronavirus cases and an unexpected rise in the weekly jobless claims.
The short-term volatility is expected to be prevalent in the markets and hence investors should remain cautious.
Q) F&O expiry will keep things volatile in the coming week, any other factors that one should watch out for?
A) Be stock specific for the time being. Global markets are moving cautiously amid a rise in the COVID-19 cases and conflicting views over US fiscal stimulus. Keep a track of FII and DII activities.
Declining global cues may impact the short-term trend of the market. COVID updates are likely to remain on the radar.
Q) What are the levels that one should track during the week? Important support levels in case the Nifty starts to head south and what can be a stiff resistance on the upside?
A) It can be said that markets have consolidated before crossing the psychological resistance level of 13,000. Also, markets have respected their support level of 12,700 and retraced with much momentum. The near- term support for the Nifty is placed at 12,700 and resistance can be faced at 13,000.
Q) What should be the investor strategy for the week: buy on dips, sell on rallies or just stay put?
A) The Nifty closed at its all-time high of 12,859.05 the previous week. The technical set-up is strong and the Nifty may test the 13,000-mark in the week. The level of 12,700 is immediate support to watch for and every dip is a buying opportunity for investors.
Technology, FMCG and private banking sectors may show strength in the coming week and investors should buy every dip.
Q) Top three-five trading ideas for the next three-four weeks?
A) Following trading ideas may give good returns during the week:
Tata Consultancy Services Ltd: Buy| Trigger: Rs 2676| Target: Rs 2,790| Stop Loss: Rs 2,605| Upside: 4.26%
The stock has witnessed reversal from its support level placed in the zone of further strength might be gained if it sustains above 2,676. TCS may out-perform its technology peers in the coming weeks.
The crossover of its short and medium-term averages on daily charts with strong volumes show signs of further upside.
HDFC Life Insurance Company Ltd: Buy| Trigger Price: Rs 670| Target Rs 728| Stop Loss: Rs 642| Upside 8.65%
The stock is witnessing a bounce from its important support level. If it sustains above 670, which is an immediate resistance level, it might give a strong bullish breakout.
The stock is trading near its 52-week high and may show good momentum if it breaks an all-time high.
Grasim Industries Ltd: Buy| Trigger Price: Rs 862| Target: Rs 938| Stop Loss: Rs 831| Upside 8.81%
The stock is forming a bullish flag pattern. If it sustains above 862, it might lead the stock to positive momentum. The stock has seen significant addition of volumes in recent days, especially in cement stocks.
The stock is showing strong momentum and if the momentum continues, the upside could stretch towards Rs 940 levels.Disclaimer
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